WhiteWave Foods

WhiteWave (NYSE:WWAV) is a division of Dean Foods (NYSE:DF). The company is spinning off the division to unlock value.

WhiteWave "develops, manufactures, markets and sells a variety of nationally branded dairy and dairy-related products, such as Horizon Organic milk and other dairy products, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products, and Silk plant-based beverages, such as soy, almond and coconut milks, and cultured soy products. WhiteWave-Alpro also offers branded plant-based beverages, such as soy, almond and hazelnut drinks, and food products in Europe and markets its products under the Alproand Provamel brands."

After the spin-off Dean will hold 150 million Class B shares, which have 10 votes per share as opposed to Class A, which have 1 vote per share. At an IPO price of $15, WhiteWave would command a market capitalization of over $2.55 billion.

The best way to play this IPO is to buy shares of Dean, which are undervalue based on the price of WhiteWave. At a $16 IPO, the rest of Dean would be worth just $700 million even though it contributes to more than 50% of profitability.

Lehigh Gas Partners LP

Lehigh (LGP) is a wholesale distributor of motor fuel. They charge "either a fixed mark-up per gallon or variable rate mark-up per gallon." They also own and rent out gas stations.

After the spin-off, the public will own from 6 million to 6.9 million common units. The Topper Group and Lehigh Gas Corporation will own 7.525 million subordinated units and .625 million to 1.525 million common units. The common units have first right to dividend payments.

The company is a limited partnership and expects to pay out all cash flow to unit holders. The company expects to pay a minimum of $1.75/share annually.

This IPO is structured almost identical to the Susser Petroleum (SUSP) IPO. Both IPOs are in the same line of business, offer the same dividend ($1.75), and the same terms for conversion of the subordinated notses. SUSP was priced at $20.50 and is currently trading at $25.

Although, I believe there will be a pop in the shares, investors should be cautious:

Lehigh is a more leverged than SUSP

Based on their 2013 projections, their rental income is negative (free cash flow is positive because of depreciation).

LGO, an entity managed by Joseph V. Topper, Jr, the Chief Executive Officer and the Chairman of the board of directors of our general partner, is leasing or sub-leasing 182 sites from the company at an aggregate initial annual rent of 3.8 million. That is $20,0000 per site. This seems really low because each site is worth around $1 million. Yearly maintenance for each site is probably around $20,000.

After the spin-off, the public will own 15 to 17.25 million common units. MPC will own the rest, 19,701,515 to 21,951,515 common units, 36,951,515 subordinated units, and 1,508,225 general partner units. The common and general partner units have first right to dividend payments. The public will have around 20% ownership.

The company is a limited partnership and expects to pay out all cash flow to unit holders. The company expects to pay a minimum of $1.05 annually.

Disclosure: I am long DF, SUSS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We only use your contact details to reply to your request for more information.We do not sell the personal contact data you submit to anyone else.

Thank you for your interest in Seeking Alpha PROWe look forward to contacting you shortly for a conversation.

Thank you for your interest in Seeking Alpha PRO

Our PRO subscription service was created for fund managers, and the cost of the product is
prohibitive for most individual investors.
PRO Alerts is our flagship product for individual investors who want to be faster
and smarter about their stocks. To learn more about it, click here.
If you are an investment professional with over $1M AUM and received this message
in error, click here and you will be contacted shortly.

Thank you for your interest in Seeking Alpha PROWe look forward to contacting you when we have an individual investor product ready!